Global catastrophe risk modeller, CoreLogic, has provided an initial insured and uninsured loss total estimate for damages from both wind and flood following the impacts of hurricane Nate, of between $600 million and $1.35 billion.
According to CoreLogic estimates, most of the loss relates to wind damage from Nate, which struck the Gulf Coast as a strong Category 1 hurricane. Between $375 million and $750 million, so as much as 56% of the wind loss, is attributed to residential properties. With between $125 million and $250 million relating to commercial wind losses.
This means that up to $1 billion, or roughly 74% of the overall loss is from wind damage to both residential and commercial properties.
Typically, explains CoreLogic, damage from hurricane wind is covered by the insurance sector, with a portion of the loss likely falling to the global reinsurance industry.
The remaining $350 million, or roughly 26% of the overall loss concerns damages from flooding, which CoreLogic says includes storm surge, inland and flash flooding, for both residential and commercial properties, in Alabama, Florida, Louisiana, and Mississippi.
For residential properties, CoreLogic estimates flood losses of between $100 million and $200 million, with commercial flood losses making up the remaining $50 million to $150 million of losses.
The flooding was contained within Special Flood Hazard Areas (SFHA), which means properties within these zones are mandated by the Federal Emergency Management Agency (FEMA) to have flood insurance. As a result, it’s expected that much of the flood loss will be covered by the re/insurance industry.
CoreLogic explains that its estimates don’t include uninsured commercial and residential flood losses, which were negligible.
RMS said recently that insured losses from hurricane Nate were unlikely to exceed $500 million, with the high end of the CoreLogic estimate being more than double this. It will likely take some time before the true economic and insured loss is understood by the market, but it’s clear that the low severity of the storm means losses will be far lower than those incurred by the three major hurricanes that hit in the U.S. and the Caribbean in the third-quarter of 2017.
